Accumulate HSIL; target of Rs 421: Angel Broking

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26 Aug, 2025 12:21

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Angel Broking`s research report on HSIL“Hindustan Sanitaryware Industries (HSIL) reported a healthy EBIDTA and PAT for 2QFY2015. Its top-line increased by 9.3% yoy to Rs424cr, led by the Packaging Products segment, the revenues of which increased by 25% yoy. The company’s EBITDA surged by 37.8% yoy to Rs75cr while the EBITDA margin expanded by 365bp yoy to 17.6% for the quarter, mainly on account of cost control measures adopted to contain power and fuel expenses (which reduced by 770bp yoy as a percentage of sales). The net profit for the quarter more than doubled on a yoy basis to Rs19cr on the back of a strong operating performance.” “HSIL is India’s largest player in the sanitaryware industry (within the organized market) and second-largest container glass producer. The company has expanded its faucets division’s capacity from 0.5mn to 3mn pieces p.a and is in the process of expanding its sanitaryware division’s (part of its Building Products segment) capacity from 3.8mn to 5.4mn pieces p.a by FY2016E. The outlook for the company’s loss making segment - Packaging Products, which had been dragging profitability and overall returns until now, now looks positive on account of merger of subsidiary Garden Polymers and recovery in container glass margins. These factors along with the new government’s focus on improving sanitation level coupled with strategic decisions like increasing focus on premium products, cost rationalization, widening market presence, improvement in plant efficiencies and changing the product mix will drive the company’s financial performance, going forward.” “We expect HSIL to register a CAGR of 15.1% in its top-line over FY2014-16E to Rs2,313cr on the back of increased capacity in Building Products segment and increased contribution of premium products. The EBITDA and net profit are expected to post a CAGR of 25% and 65.7% respectively over FY2014-2016E, reflecting management efficacy. The stock is currently trading at a P/E of 16x its FY2016E EPS. With revival in its Packaging Products segment and strong outlook for the sanitaryware industry, we recommend an Accumulate rating on the stock with a target price of Rs421, valuing the stock at 18x its FY2016E EPS of Rs23.4,” says Angel Broking research report.   

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